Vineyards marketed in mortgagee and receivership sales as grape prices poised to improve

The start of 2012 has brought another two Marlborough vineyards to the market for sale - Tetley Brook Vineyard through a mortgagee sale, and Sedgebrook Estate through a receivership sale.

Both vineyards are in Marlborough’s prolific Awatere Valley sauvignon blanc growing region, and both are substantial grape producing operations.

Tetley Brook Vineyard is the first of the two blocks to go up for sale – with offers to purchase being accepted until a March 1 deadline. Meanwhile, tenders for the purchase of Sedgebrook Estate close on March 7. Both properties are being marketed individually for sale by Bayleys - with sales teams in Christchurch, Marlborough and Auckland being brought on board for the campaigns.

Tetley Brook Vineyard near the regional township of Seddon was established in 2006 and contains almost 50 hectares of staked sauvignon blanc plantings. The vineyard has its own 50,000 cubic metre dam and pumping station to effectively irrigate the 114,757 vines which are planted on flat to moderately undulating terrain.

Constellation Wines Ltd has a grape supply agreement over 29.4 hectares of fruit at Tetley Brook Vineyard, while international beverage marketer Pernod Ricard has also previously taken up to an additional 20.9 hectares of fruit. The phylloxera-resistant root stock is planted in a mix of Sedgemere and Flaxmore Hill soils.

Brands under the Constellation Wines portfolio include Kim Crawford, Selaks, Nobilo, Drylands and Monkey Bay. Both Drylands and Kim Crawford already have existing company-owned sauvignon blanc vineyards in the Marlborough region.
Buildings on the Tetley Brook land include a concrete-floored machinery and implement shed with steel framing and aluminium cladding. The building also contains staff amenities. Beside the dam is a concrete-floored pump shed. Tetley Brook Vineyard holds 54 shares in the Blind River Irrigation Scheme (BRIL) - allowing the property to draw 837 m3 of water per hectare per day. The vineyard has a rating valuation of $3.8million.

Sedgebrook Estate also near the town of Seddon is a 47 hectare production unit of some 77,000 sauvignon blanc vines planted in 2006. Sedgebrook Estate draws its irrigation form a 35,000 cubic metre dam through its own pumping station. Sedgebrook Estate holds 35 shares in the Blind River Irrigation Scheme (BRIL) - allowing the property to draw 542.5 m3 of water per hectare per day. The property has a rateable valuation of $2.827million.

Included in the sale are nine large frost-preventing wind turbines strategically located throughout the vines The buildings on the vineyard include a four bay implement shed (one bay has a secured rolling door) and a large pump/irrigation shed with a concrete slab. The Sedgebrook Estate receivers have just signed a three-year supply contract with wine label Yealands.

Bayleys Marlborough viticulture sales specialist John Hoare said both vineyard operations had the potential to generate substantial revenues, and were being sold just as the industry’s governing body had forecast a rise in the grape tonnage prices paid to producers.

“With per-hectare valuations for grape producing land now substantially lower than four years ago, and the sauvignon blanc supply-and-demand equilibrium rebalancing, there is now a growing degree of support for the viticulture industry where previously there was a ‘wait and see’ attitude,” Mr Hoare said.

“The sale of these two vineyards reflect that there is still more rationalisation and consolidation to come from vineyards whose profitability for the past couple of years has been marginal at best. At the end of the day, profitability now comes down to efficiencies of production – and that only really come into play through size.

“The production fundamentals of both Tetley Brook and Sedgebrook Estate are sound - they have both been planted well to maximise grape growth potential and harvesting efficiency, and they are both located in the heart of Marlborough’s Awatere Valley sauvignon blanc production area.”

Mr Hoare expected strong local interest in the sales from larger wine producers looking to expand their Marlborough sauvignon blanc capacity, and purchase planted land in the vicinity of other already-owned vineyards.

“With the extensive contacts and networks we have established over the past two years of selling down similar receivership and mortgagee vineyard and winery land holdings, we are confident of finding new owners for both Sedgebrook Estate and Tetley Brook.

New Zealand Wine Growers chairman Stuart Smith reported that a significant drop in this year's sauvignon blanc grape yield could finally boost Marlborough's saturated wine industry - as uncontracted growers began to look at meeting the demand from buyers… and the consequence of achieving potentially higher prices.

He noted that some growers had reported a 30 per cent fall in sauvignon blanc grape tonnage since pre-flowering estimates, as unfavourable weather conditions affected crops after thinning.

That expected smaller harvest could boost prices for spot growers - who have previously struggled to find buyers for what were several years of bumper harvests and a consequential sauvignon blanc grape glut.

Mr Smith said any shortage of sauvignon blanc grapes would benefit un-contracted growers.

"It's been a long time coming for spot growers who haven't had a market for the last few years," he said.